Inflation Rate Eases Slightly in July, Still Elevated Year-On-Year

Nigeria’s headline inflation rate eased slightly to 33.40% in July 2024, down from 34.19% in June 2024.

Despite this modest reduction, the inflation rate remains high compared to the same period last year.

The 0.8 percentage point decline in the headline inflation rate from June reflects a slight easing in the rate of price increases.

On a month-on-month basis, inflation showed a small reduction to 2.28% from 2.31% in June. This indicates a slower rate of price growth compared to the previous month.

However, on a year-on-year basis, the inflation rate in July 2024 was significantly higher than the 24.08% recorded in July 2023, marking a 9.32 percentage point increase.

This highlights the persistent inflationary pressures affecting the economy over the past year.

Divisional Contributions:

• Food & Non-Alcoholic Beverages: Contributed 17.30% to the year-on-year increase.
• Housing, Water, Electricity, Gas & Other Fuels: Contributed 5.59%.
• Clothing & Footwear: Contributed 2.55%.
• Transport: Contributed 2.17%.
• Furnishings & Household Equipment & Maintenance: Contributed 1.68%.
• Education: Contributed 1.32%.
• Health: Contributed 1.00%.
• Miscellaneous Goods & Services: Contributed 0.56%.
• Restaurant & Hotels: Contributed 0.40%.
• Alcoholic Beverages, Tobacco & Kola: Contributed 0.36%.
• Recreation & Culture: Contributed 0.23%.
• Communication: Contributed 0.23%.

Urban vs. Rural Inflation:

• Urban Inflation: Rose to 35.77% year-on-year in July 2024, up from 25.83% in July 2023. Month-on-month, urban inflation decreased marginally to 2.46% from 2.46% in June.
• The twelve-month average urban inflation rate stood at 32.89%, an increase from 22.87% in July 2023.
• Rural Inflation: Increased to 31.26% year-on-year in July 2024, up from 22.49% in July 2023. Month-on-month, rural inflation declined to 2.10% from 2.17% in June.
• The twelve-month average rural inflation rate was 28.86%, up from 21.04% in July 2023.

Market Impact: The persistent high inflation rates continue to affect consumer purchasing power and economic stability.

The slight easing in July offers a modest relief but does not fully address the broader inflationary trends.

Analysts and policymakers are closely monitoring these developments to gauge the effectiveness of current economic measures and their impact on inflation control.